Serious Illness of Grandson: ITAT remands Section 54F Income Tax Exemption Claim to AO [Read Order]
The Tribunal had previously remitted the 54F issue to the AO for de novo consideration, with directions to examine supporting documents produced by the assessee.
The Income Tax Appellate Tribunal, Ahmedabad Bench, has directed the Assessing Officer to re-examine the assessee’s claim of exemption under Section 54F for AY 2012-13 after giving a fresh opportunity of hearing, holding that exceptional personal circumstances justified a reconsideration of evidence. The appeal was allowed for statistical purposes.
The original assessment under section 143(3) dated March 4, 2015, recorded total income of Rs. 67,43,436 against a return of Rs. 9,74,220, after additions including disallowance of deduction claimed under section 54F amounting to Rs. 58,15,000. The CIT(A) had earlier confirmed the AO’s additions.
The Tribunal had previously remitted the 54F issue to the AO for de novo consideration, with directions to examine supporting documents produced by the assessee. The AO, on a later proceeding dated September 20, 2021, denied the exemption again on account of non-submission of evidence. The assessee’s appeal before the CIT(A) was summarily dismissed.
The appellant’s authorised representative submitted that the assessee had filed additional evidence before the CIT(A) and that the CIT(A) erred in summarily dismissing the appeal by invoking Rule 46A of the Income-tax Rules without examining the material. Counsel emphasised that non-appearance and failure to file material before the AO was due to acute family distress caused by the serious illness of the assessee’s grandson. The assessee sought restoration to the AO for fresh adjudication after permitting production of the pending documents.
The Appellate Tribunal recorded the factual narrative contained in the CIT(A) order, which acknowledged that the assessee and her family were severely distressed because the 14-year-old grandson was diagnosed with malignant brain tumours and undergoing treatment. The Bench accepted that these were exceptional and compelling reasons for non-compliance in the earlier proceedings.
The Tribunal thus found merit in the petitioner’s request for an opportunity to produce the evidence before the AO. Observing that the earlier remand had specifically asked the AO to decide the Section 54F Income Tax Exemption claim de novo upon examination of supporting materials, the Tribunal concluded that justice required that the AO be given another chance to consider the claim after affording a proper hearing.
The Tribunal therefore remitted the matter back to the Assessing Officer to decide the claim of exemption under Section 54F after providing the assessee a fair opportunity of being heard.
The appeal was thus allowed for statistical purposes.
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